Stock Market Rules: 50 of the Most Widely Held Investment Axioms Explained, Examined, and Exposed (Third Edition)

by Michael D. Sheimo

Overview

Published by McGraw-Hill in its third edition (2005), this book systematically examines 50 widely held investment axioms, testing each against historical evidence and market reality. The result is a practical guide that helps investors distinguish between genuine wisdom and dangerous folklore.

Structure

The book is organized into thematic sections covering Research, Price Behavior, Market Indicators, and Timing. Each chapter takes one axiom, explains its origin and logic, examines the evidence for and against it, and delivers a verdict.

Sample Axioms Examined

• "Get Information Before You Invest, Not After"
• "Price Doubling Is Easier at Low Prices"
• "Good Companies Buy Their Own Stock"
• "Heavy Volume, the Price Rises; Light Volume, the Price Falls"
• "Watch the Bellwethers"

Value

The book's strength is its empirical approach. Rather than simply repeating conventional wisdom, Sheimo tests each rule and shows where common assumptions break down. This helps readers develop a more nuanced understanding of market behavior and avoid the trap of following rules that sound wise but lack evidentiary support.